IZGAZ

completed

The project involves the financing of capital expenditures for network expansion, refinancing of gas payables and general corporate needs of İzgaz İzmit Gaz Dağıtım Sanayi ve Ticaret A.Ş. (“İzgaz’), a natural gas distribution and retail company with over 200,000 subscribers in the in the Kocaeli region (except Gebze and Karamursel) in Turkey. Izgaz was privatized in January 2009 pursuant to competitive bidding process. GDF Suez S.A. indirectly owns 90% of the shares of Izgaz.Located 80 km to the east of Istanbul, the Kocaeli region is one of the most industrialized areas in Turkey, accounting for 5% of the GDP, 13% of national manufacturing output and around 18% of foreign trade. Izgaz is the third largest gas distributor in Turkey, with 200,000 subscribers, about US$227 million revenues, and a distributed gas volume of 1 billion cubic meters in 2007 (representing 17% growth over 2006). By the end of 2007, Izgaz’s network reached all except one province in its license region.Distributed gas volumes include 40% sales to industrial customers, 16% sales to residential customers, and 44% supplied to industrial consumers through provision of transportation-only service. Among the 80 industrial customers, are a number of Turkey’s largest industrials such as Ford, Hyundai and Turkey’s refinery monopoly Tupras. Izgaz also has a growing residential portfolio, driven by the high urban population of 64% as well as Kocaeli’s substantial population growth spurred by intense migration to industrial centers.Izgaz possess 11 RMS-A stations with permanent staff (1 station is not in use) and 156 unmanned RMS-B stations. Approximately 300 km of the pipelines are steel pipes and 2,000 km are made of polyethylene (PE). The pipeline network construction of Izgaz is almost 90% completed. In 2009 no major construction activities are intended. However, in the next 10 years, construction of another RMS-A station for industrial supply and an extension of the grid system is planned. For instance, in order to guarantee an uninterrupted gas supply for the customers and in view of system security and equal distribution, Izgaz plans to build a ring line with a 3-km pipeline leading through the Sea of Marmara (sub-sea pipelines).